Cosmetics giant Revlon filed for chapter 11 bankruptcy protection, citing supply chain issues and a “challenging capital structure.”
The beauty product supplier said it is struggling to carry a cumbersome debt load amid high inflation rates and rising interest rates.
“Revlon is the first major consumer-facing business to file for bankruptcy protection in what has been a yearslong pause of distress in the retail sector.” CNBC reported.
CNBC reported:
Cosmetics giant Revlon filed for Chapter 11 bankruptcy protection on Wednesday evening as it grappled with a cumbersome debt load and a snarled supply chain.
The company said it expects to receive $575 million in debtor-in-possession financing from its existing lender base, which will help to support its day-to-day operations.
The filing “will allow Revlon to offer our consumers the iconic products we have delivered for decades, while providing a clearer path for our future growth,” Revlon President and Chief Executive Officer Debra Perelman said in a press release issued Thursday morning.
“Our challenging capital structure has limited our ability to navigate macro-economic issues in order to meet this demand,” Perelman added.
Revlon’s bankruptcy filing said the company is currently unable to timely fill almost one-third of customer demand for its products, due to an inability to source a “sufficient and regular supply of raw materials.” Shipping components from China to the United States takes Revlon eight to 12 weeks and costs four times 2019 prices, it said.
Revlon was one of 76 cosmetic companies to bow to BLM’s demands amid the George Floyd riots in 2020.
76 beauty brands accepted BLM’s “Pull Up Or Shut Up” challenge and vowed to be more transparent about their black representation.
The companies were also asked to increase their black representation and post their progress.
“Revlon revealed 27% of its employees are Black; of those, 5% are on the director level.” Vogue reported in June 2020.
When she launched the #PullUpOrShutUp challenge, Uoma Beauty founder Sharon Chuter asked for numbers and, a few days later, some brands have delivered.
Following the widespread #BlackOutTuesday in support of the Black Lives Matter movement and to protest the killing of George Floyd, Chuter stepped up and addressed the underlying race problems present in the fashion and beauty industries. Posting a performative black square and a Martin Luther King Jr. quote is easy, but the real work happens on the inside, and Chuter’s #PullUpOrShutUp challenge addresses that.
On June 3, Chuter prompted beauty brands to publicly share how many Black employees each company has working at a corporate level and in leadership roles, highlighting that only 8% of people employed in white-collar professions are Black. A lot of beauty brands profit off of the Black dollar and work with many Black influencers to target that audience, but we don’t really know what the internal teams look like. Chuter gave brands 72 hours to “pull up” and reveal the percentages of Black representation; within 24 hours the results started to roll in.